2 minute read 31 May 2021
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COVID-19: Employer requirements and considerations

By Debera Salam

EY Employment Tax Advisory Services Associate Director

Thought leader. Committed to empowering the payroll community with learning tools. Author. Passionate about combining the creative, innovative and technical.

Contributors
2 minute read 31 May 2021

Federal COVID-19 provisions applicable to employers and some of the state and local tax considerations that apply. 

To contain the outbreak of COVID-19 in the US, numerous states and local governments have temporarily closed nonessential businesses and issued “stay-at-home” orders, creating a historic disruption to the US workforce. Unlike most major disasters that affect only a segment of the US population, the adverse effects of COVID-19 are nationwide (and global). In response to COVID-19’s impact on US businesses and its employees, federal legislation was enacted to extend paid leave to certain employees, expand unemployment insurance (UI) benefits and provide cash flow to employers through tax credits, tax payment deferrals and forgivable loans.

Some states and localities have also responded by expanding their paid leave mandates, waiving certain reporting requirements and providing extensions on the due date of payroll tax returns, tax payments or both. COVID-19 has also dramatically increased the number of employees working from home, an arrangement that is new for many employers. Telecommuting raises numerous questions, from the tax treatment of equipment and supplies to the payroll tax rules that apply.

For more information, download the report and visit our Employment Tax Advisory Services page.

Summary

Federal, state and local governments are responding quickly to craft legislation, regulations and policies to address the unique workforce challenges created by the global COVID-19 crisis. The resulting framework is complex and confusing, and in many cases, guidance is still forthcoming. Employers will be challenged in the months ahead to comply with the requirements governing employee protections while at the same time properly taking advantage of COVID-19 relief measures that can bring them administrative and financial relief.

About this article

By Debera Salam

EY Employment Tax Advisory Services Associate Director

Thought leader. Committed to empowering the payroll community with learning tools. Author. Passionate about combining the creative, innovative and technical.

Contributors